BCG Matrix which is also portfolio matrix is used in corporate strategy was first discussed by Bruce Henderson in 1970 in an essay.

This matrix is used to evaluate strategic business units/product lines to make investment decisions

It is a planning tool that uses graphical representations of a company’s products and services in an effort to help the company decide what it should keep, sell, or invest more in.

The matrix plots a company’s offerings in a four-square matrix, with the y-axis representing the rate of market growth and the x-axis representing market share.

The market growth rate shows the rapid demand of a product and market attractiveness.

The market share is the rate compared to the competitors revenue or unit
Market share is the percent of total sales in an industry generated by a particular company.

There are four parts of the matrix

The Dog, the star, the cow and the question mark

Dogs (or Pets)
If a company’s product has a low market share and is at a low rate of growth, it is considered a “dog” and should be sold, liquidated, or repositioned. Dogs, found in the lower right quadrant of the grid, don’t generate much cash for the company since they have low market share and little to no growth. Because of this, dogs can turn out to be cash traps, tying up company funds for long periods of time.

It is recommended that money shouldn’t be wasted on dogs

Cash Cows
Products that are in low-growth areas but for which the company has a relatively large market share are considered “cash cows,” and the company should thus milk the cash cow for as long as it can. Cash cows, seen in the lower left quadrant, are typically leading products

Generally, these products generate returns that are higher than the market’s growth rate and sustain itself from a cash flow perspective. These products should be taken advantage of for as long as possible. The value of cash cows can be easily calculated since their cash flow patterns are highly predictable

Stars
Products that are in high growth markets and that make up a sizable portion of that market are considered “stars” and should be invested in more. In the upper left quadrant are stars, which generate high income but also consume large amounts of company cash. If a star can remain a market leader, it eventually becomes a cash cow when the market’s overall growth rate declines.

It is recommended that the company should invest in the stars.

Question Marks
Questionable opportunities are those in high growth rate markets but in which the company does not maintain a large market share. Question marks are in the upper right portion of the grid. They typically grow fast but consume large amounts of company resources. Products in this quadrant should be analyzed frequently and closely to see if they are worth maintaining

The company should test run the products under this category.

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